Life Insurance and Medical Information Bureau (MIB)

This was a rather interesting week for me. For the first time ever, I had a life insurance agent cursed at me with an F word. The story started last summer when I tried to purchase a term life insurance policy from this agent. He helped my parents stop the monthly payments on their whole life policies from New York Life, and let the policies pay for themselves using the existing cash value plus the dividends. Naturally, I consulted with him about my own life insurance.

He walked me through a few options and gave me several term life insurance quotes from New York Life. I didn’t think they were affordable and didn’t pull the trigger. Later he came back saying that he is actually an independent agent and could work with many different insurance companies. He then offered to get me a few more quotes, which I accepted. In the mean time, I started to look online through sites like InsureMe, so that I can get an idea of the ballpark figure.

A few days later he came back with an attractive rate from Prudential, so we started the application process. But the insurance company had a few questions and they requested for my medical record. Unfortunately, I just switched doctor at that time so the new one didn’t have enough information about me, and my other lousy doctors that I left for various reasons weren’t too cooperative with getting my record over to Prudential. To keep a long story short, I ended up go through a few hoops, including getting a few tests done. The result from these tests concluded that I was not going to die any time soon — I was healthy.

Once Prudential received the results, they completed the application and made me an offer. The agent called with the offer; however, the annual premium was three times higher than what he originally quoted. When I asked why, he said that the insurance company found elevated liver enzymes from their independent blood test — hmm…a completely different problem all the sudden. As a result, I declined the policy saying that I have blood test done annually and none of doctors ever mention anything about my liver before.

This is when he started to tell me all kind of things about the Medical Information Bureau (MIB) and how my record is now red flagged and I’ll never be able to get another life insurance policy from any company again. When I called his bluff, he lost his temper and start saying that he wasted a lot of time on me and eventually resorted to swearing.

What Is Medical Insurance Bureau (MIB)?

This agent tried to scare me more than once using the MIB as a scarecrow, so I want to talk a bit about this entity.

Medical Information Bureau, or MIB, is a non-profit trade association that enables its member companies to share information in the form of medical codes. There are approximately 230 codes the MIB uses to signify different medical conditions. Member companies use it as a clearinghouse for all life, health, and disability insurance applications, primarily to protect themselves from fraud by cross checking medical information, and identify individuals who might be stacking coverage with multiple carriers.

The Truth About MIB

Here are a few facts about MIB that you should be aware of if someone ever try to pull a fast one on you.

Only about 20% of applicants have an MIB record. These are individuals who have applied for individually underwritten life, health, or disability insurance coverage within the last seven years and been found to have a medical issue.

A code can only be entered by an underwriter of a member company.

A code stays active in the MIB system for seven years.

Any information in the MIB cannot be used directly to deny someone insurance. In other words, an insurance underwriter cannot just decline your application because you have a record in the MIB.

The Fair Credit Reporting Act requires insurance companies to notify you if they intend to contact the MIB and give your information to them.

You have the right to see your MIB file, if there is one. To see your record, contact the MIB at www.mib.com.

When my ex-insurance agent told me that I will have an MIB record and will never be insured by anyone again — that is a lie. The MIB is analogous to credit bureau (i.e., Experian, Equifax, and TransUnion), and your MIB record is similar to your credit report. In the same way that your credit history and credit score are designed to help lenders make informed decisions pertaining to you, the MIB is designed to help insurers.

About the Author

Pinyo is the owner of Moolanomy Personal Finance. He is a licensed Realtor specializing in residential homes in the Northern Virginia area. Over the past 20 years, Pinyo has enjoyed a diverse career as an investor, entrepreneur, business executive, educator, and financial literacy author.

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Leave Your Comment (43 Comments)

Was wondering about the MIB and health insurance coverage in Texas. I know that my husband and I applied for Life Insurance in 2000 (got it). We have always been on employer-sponsored Health Insurance. We will be applying for our OWN coverage now (within the 63 -day continuance period, as my COBRA ended 8/31/12). Would we be in the MIB? If so, would it help or hinder us to get our reports?

I also just read that if we get coverage within that 63-day period, an insurer can’t invoke a pre-existing condition limitation on us??

I put in applications with 3 different ins. companies to get whole life ins. One ins. co. sent me an email stating that they are now showing that I submitted a life insurance application to another carrier in March and they are needing to know the specifics of this to approve & finalize my policy. The need to know the carrier name, type of life policy (term or whole), how much I am applying for, and the status (in force, pending or cancelled, etc..) to clear and issue at the rate quoted.

Can this ins. co. require me to share this information with them about the other ins. co.? I am trying to get the best premium quote. I don’t understand why they would ask for this information. If I were shopping for a car and went to 3 dealers, one dealer couldn’t ask me to share information from the other dealer. I’ll look forward to your response.

@Jackie: The insurance industry is very over-regulated. The insurance commissioner (state governed) requires all replacement information, including applications applied for (whether accepted, declined or not-taken), be disclosed and acknowledged by the insured. This is an effort to protect the insured from churning, or replacing existing policies for no reason other than generating commission.

The intention is to protect you, but it is inconvenient. A lot of the process of applying for life insurance is inconvenient and unfortunately a lot of the agents are not very professional or knowledgeable.

Yes Jackie, this is legal. There is a maximum amount of coverage that will be issued on your life and each carrier you apply to will need to know where you are accepting coverage to make sure you are not over-insured and to make sure they are not taking on too much risk. If you apply for credit cards and loans, all that activity shows up on your credit report and affects your credit score. Just like credit bureaus, MIB information is used as a monitoring system for insurance carriers to manage risk. Your bank does similar things. Most insurance procedures are in place to keep the best interests of the insureds in mind, they are not in place to provide advantages to the insurance company as a way to cheat the end consumer. Various procedures may seem confusing but a qualified agent can explain procedures and processes so that you can understand them and feel comfortable with the process.

MIB information is not normally going to hinder your ability to obtain life insurance. If there are discrepancies, there are steps you can take to correct them (if they are in fact, incorrect codes). Most people are not affected by MIB codes.

Please keep in mind, with the strict HIPAA laws and privacy policies that are in place, MIB and insurance companies take great care to protect your information and do not share inappropriately.

Underwriters are looking at files and determining long term risk, financially and medically. They attend meetings and receive training from their company to learn more about medical risks. Some companies have MD’s that work for them and provide feedback and training to underwriters. Underwriter’s often have more up to date information and studies available to them than practicing MD’s do. Or maybe the underwriter’s just take more time to keep their knowledge current. Often MD’s will write letters to companies advising that their clients are in perfect health, when it is clear that the client has symptoms that they should be addressing already, often times with simple diet and lifestyle improvements. For example, it’s common for insurance companies to see that a client is pre-diabetic, however the client’s MD has told the client they are in perfect health, nothing to worry about when the test results are clearly pointing in another direction. Most insureds are upset when an insurance company finds something of concern and instead of going right to their MD, who will most likely tell them that they are fine (without researching thoroughly enough), I believe (given the state of our broken medical system) the insured should obtain their records and lab results and do a bit of research themselves.

It’s up to each of us to find a trustworthy financial rep. That Rep/agent will be able to help us with any questions, concerns, problems we run up against. If they can not help you, they are not doing their job so find a better one. Most of the problems and concerns I see listed above, could be answered and resolved by working with a qualified agent who has their client’s best interests in mind. Even if the agent does not have all the answers immediately, they will know who to contact to get the situation resolved. Although please keep in mind that this may not be resolved overnight. Some of these issues take time to resolve due to the systems and laws that are in place. Look at The Evil Insurance Salesman’s responses. That person obviously knows their stuff. Find your own The Evil Insurance Salesman!

We just turned down life insurance because of a sketchy privacy policy relating to MIB, which we’d never heard of before today. The bummer is we really like our insurance agent.

The language in the Authorization for Use or Disclosure of Protected Health Information states that information will be released to MIB, and that after the information is received by “the person or entitiy” (MIB), that our medical information “may be redisclosed and no longer protected by these regulations.”

There is no information about the limitations of storing, sharing, selling, trading, or otherwise making our medical information available. By signing this form we in effect give MIB and every MIB member permission to do whatever they want with our information.

This makes a joke of HIPAA, and we just can’t give this sort of unlimited access to our private medical information without any assurances. The bummer is we’d like life insurance.

“The federal Gramm-Leach-Bliley Act (GLB) allows financial companies such as banks, brokerage houses, and insurance companies to operate as a single entity. GLB gives you the right to be notified about the information-sharing practices of financial institutions. And you must be given an opportunity to opt-out of third-party information sharing. But GLB does not keep information from being shared among affiliated companies.”

Also, if you are referring specifically to your MIB record, here’s what the article has to say:

“The MIB is not subject to HIPAA. MIB files do not include the totality of one’s medical records as held by your health care provider. Rather it consists of codes signifying certain health conditions.”

In any case, you may have signed a Privacy Policy when you applied for your insurance. You have to read that because it will say specifically what the insurance company can and cannot do with your information.

@UnKnown – I am not sure about your specific circumstance, but it sounds like you should be protected by 1996 HIPAA Privacy Law. Please take a look at this site for more information: http://www.hhs.gov/ocr/privacy.....index.html

This agent should be removed from the field, however underwriters are a different breed they base there decisions on a set criteria. So what your doctor thinks is usually very different then an underwriter.

I am trying to figure out if we apply for Life Ins. if they will notice a prescription my husband was taking last year to get off an opiud drug a friend of his got him on. Last year I had group ins. in FL and he did use this ins to pay for the medication and the doc that presribed it. He used a different doc than his regular physician. He was on it for less than a year. We now live in a different state. We now have individual health ins. We would like to apply for Life insurance, but I am wondering if he should wait 7 years.

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